- Bank of Canada keeps rates at 1.25%
- Federal Reserve’s Beige Book reveals growth prospects for the US economy
By Ricky Nelson
The Euro managed to rise from recent lows yesterday on positive news emanating from Italy. There are signs that the Italians may not be headed for a new election as President Mattarella has given the League and the Five Star Movement additional time to form a government. The decision to slow things down was an attempt to avert a possible financial crisis particularly in light of what a new vote could bring. Stock markets recovered and the EURUSD is now back above 1.1700.
Bank of Canada keeps rates at 1.25%
Overnight, the Bank of Canada (BoC) left policy unchanged but delivered a fairly hawkish message. The BoC dropped references to some monetary accommodation still being needed and removed language on remaining cautious. Economists are now pricing in a rate hike as early as July and perhaps another before the end of the year. The Canadian Dollar looks set to strengthen further.
Federal Reserve’s Beige Book reveals growth prospects for the US economy
In the United States, the Beige Book was published which demonstrated that there is still good growth prospects for the US economy. The Federal Reserve stated that the US grew moderately at the beginning of Quarter Two and that the manufacturing sector in particular was robust, indicating that the central bank remains on track to raise rates next month. A tight labour market alongside rises in prices should ensure that the central bank continues to raise rates gradually in 2018 which will keep the Dollar buoyant.
Looking ahead to today, we await mortgage approvals from the UK and jobless claims from the US this afternoon. All eyes will then turn to the all-important Non-Farm Payrolls data tomorrow afternoon.